Correlation Between Simple Mart and Fu Burg
Can any of the company-specific risk be diversified away by investing in both Simple Mart and Fu Burg at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Simple Mart and Fu Burg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Simple Mart Retail and Fu Burg Industrial, you can compare the effects of market volatilities on Simple Mart and Fu Burg and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Simple Mart with a short position of Fu Burg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simple Mart and Fu Burg.
Diversification Opportunities for Simple Mart and Fu Burg
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Simple and 8929 is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Simple Mart Retail and Fu Burg Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fu Burg Industrial and Simple Mart is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Simple Mart Retail are associated (or correlated) with Fu Burg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fu Burg Industrial has no effect on the direction of Simple Mart i.e., Simple Mart and Fu Burg go up and down completely randomly.
Pair Corralation between Simple Mart and Fu Burg
Assuming the 90 days trading horizon Simple Mart is expected to generate 6.97 times less return on investment than Fu Burg. But when comparing it to its historical volatility, Simple Mart Retail is 1.86 times less risky than Fu Burg. It trades about 0.02 of its potential returns per unit of risk. Fu Burg Industrial is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,175 in Fu Burg Industrial on September 2, 2024 and sell it today you would earn a total of 1,220 from holding Fu Burg Industrial or generate 56.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simple Mart Retail vs. Fu Burg Industrial
Performance |
| Timeline |
| Simple Mart Retail |
| Fu Burg Industrial |
Simple Mart and Fu Burg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simple Mart and Fu Burg
The main advantage of trading using opposite Simple Mart and Fu Burg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simple Mart position performs unexpectedly, Fu Burg can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Fu Burg will offset losses from the drop in Fu Burg's long position.| Simple Mart vs. Taiwan Semiconductor Manufacturing | Simple Mart vs. Hon Hai Precision | Simple Mart vs. MediaTek | Simple Mart vs. Chunghwa Telecom Co |
| Fu Burg vs. Gloria Material Technology | Fu Burg vs. Wei Chih Steel | Fu Burg vs. Daxin Materials Corp | Fu Burg vs. Nankang Rubber Tire |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |